Basic income introduction would help both our citizens and our economy

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This month it was announced that New Zealand and Ontario would be joining places including Quebec, the Netherlands and Finland in considering pilot programmes to test the efficacy of basic income schemes. Basic income – AKA ‘free money’ – is a system in which individuals receive monthly income cheques regardless of their working status or current income. This is a refreshing prospect that could benefit the job climate, our lives beyond work and perhaps even our public health.

The job market in 2016 is intimidating; whether you have plenty of experience or none, whether you are debt-free or in over your head or whether you are responsible for yourself or for others as well. The idea of guaranteed minimum income has been around since the 16th century, and with good reason – it can ease the burdens of poverty and overcome inequality and unemployment in all of society, not just the most disadvantaged.

The jobs market for graduates is the best it has been since 2007. Yet uncertainty abounds in the form of the EU Referendum, changes to student finance options and employers’ doubts regarding graduate employability. Basic income offers stability in a fluctuating job climate, where graduates make up a third of the work force but pay remains stagnant and jobs are often below their skill level.

Basic income would help every demographic. In the UK and the EU, inequality in income and wealth is increasing, and structural unemployment (i.e., the skills gap) rises even as unemployment itself falls. Job satisfaction is low, we work long hours and we face competition not only from other people but from machines. A basic income scheme would provide a safety net for those who are forced from their jobs and equally for those who choose to leave out of preference or responsibility.

Economic analysts say that the amount of basic income citizens receive should be enough to encourage savings and investment but not enough to discourage work. New Zealand and Canada do not yet have concrete figures, but Finland’s proposed trial will allow citizens £622 monthly, more than double the amount of Jobseeker’s Allowance payments in the UK. Cities in the Netherlands will dole out around £690.

On a societal level, there is no telling how extensive the benefits could be. It is predicted that welfare programmes could afford cuts to areas like health, income and housing, and eradicate controversial assessment processes for such welfare – processes with detrimental effects on citizens’ health. There are the obvious advantages – such as the potential to reduce homelessness and poverty – but citizens’ health and job satisfaction could improve too.

What are the disadvantages of basic income, then? Not a lazy, unmotivated workforce but rather the huge fiscal costs to launch such programmes, the tax increases required to fund them and potential increases in cost of living. Implementation is not straight-forward but neither was that of the NHS, nor will be the slaying of any giant.

When Canada and the U.S. experimented with free money back in the 1960s, the results were inconclusive. We only have a few sources of insight into how modern manifestations of basic income might work out: a four-year study in Uganda from 2013 and a trial in Manitoba during the 1970s. Labour force participation in these instances did not drop (except for new mothers and students).

The upcoming pilot programmes in Canada and elsewhere will hopefully inspire other provinces and countries to consider trials if not implementation. Such a model seems a long way off from consideration in the UK or Scotland, but perhaps academic and political momentum in upcoming years will shed light on the widespread, long-term advantages of ‘free money.’